Rea and Finsbury in talks
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Rea Brothers, the small London merchant bank, is in talks to buy Finsbury Asset Management for just under £4m as part of a continuing effort to rationalise the Salomon family business group, of which both companies are members.
Rea Brothers' shares lost 2p yesterday to finish at 62p.
Roger Parsons, Rea's managing director, said: "The deal brings the wider group together and gives a much clearer picture of the business. Combined funds under managment will total over £500m, and Finsbury shareholders will enjoy earnings enhancement."
Rea has about £300m in funds under management. Salomon family interests already own over half of Rea Brothers and nearly a quarter of Finsbury. Four investment trusts managed by Finsbury own the rest of the fund management group.
Rea Brothers will also sponsor the listing of a new investment trust, Finsbury Worldwide Pharmaceutical Trust, which will aim to attract £25m. The pathfinder prospectus is expected to be published on 16 February.
Mr Parsons added that Finsbury was already a tenant in Rea's City offices, which made the deal all the more sensible.
The bank said yesterday that it "believed it was appropriate to announce that talks were in progress which might result in the acquisition of Finsbury Asset Management by Rea Brothers. It is expected that the consideration for the acquisition will comprise ordinary shares of Rea (which the vendors intend to undertake to retain for a period), valuing the business of Finsbury Asset Management at approximately 2 per cent of funds under management".
Rea is being advised by Kleinwort Benson Securities and the shareholders of Finsbury Asset Management's holding company, Finsbury Group, by UBS.
Rea made pre-tax profits of £621,000 in the first half of 1994, down about 20 per cent on a year earlier.
The board said it hoped that an announcement of the final proposals resulting from talks with Finsbury would be made with that of Rea's preliminary results for the year ended 31 December 1994.
"These results are expected to show that Rea's profits before tax in the second half of 1994 were comparable with those achieved in the first half, reflecting the subdued conditions during that period prevalent in the markets in which Rea is active," the directors said.
Finsbury Asset Management was founded in 1985. William Salomon and his brother in law Anthony Townsend are directors both of Finsbury and Rea Brothers.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments